Economics, Complexity and the Disenchantment of 20-29 the Social World
Even though he is widely considered to be the founding father of the economic discipline, Adam Smith would have a hard time finding a job at an economics department or getting his ideas published in any of the major economics journals, had he lived today. One of the central reasons for this is that neoclassical economics, which dominates the discipline today, and economics at the time of the great political economists such as Adam Smith and David Ricardo are differentiated by one single characteristic more than any other: their use of mathematics1 (Schabas, 1989). While today’s economics is best characterized as a thoroughly mathematical science, the writings of the classical economists were almost entirely discursive (Lawson, 2012; Hodgson, 2013). This mathematical condition of modern economics has quite recently become the subject of heated debate and strong criticism in light of the economic crisis that has hit us in 2008 and still lingers on today. Many (i.e., Friedman, 1999, p. 137; Krugman, 2009a, 2009b) have argued that, caught up in more and more complex models, economics itself had become detached from its appropriate subject matter: real world economic problems. The economic science failed to make sense of our reality, and instead got lost in a different reality of their own making consisting of models and equations. Such criticisms regarding the role of mathematics in economics and its inability to capture our economic reality are not, however, just something of the past seven years. Even though the role of mathematics has evolved to one of absolute dominance since the end of the 19th century, many have voiced criticisms towards this development. And the list of those critical of the mathematization of economics does not just name quirky heterodox economists at the margins of the discipline but also includes some of the most famous and important economists of the 19th and 20th century. In this paper I will take a closer look at some of the concerns and warnings about the role of mathematics in economics put forward by Alfred Marshall, Friedrich Hayek and John Maynard Keynes. Specifically these economists have been selected because each of them has had a significant and constituting influence on the economic discipline, and because taken together they represent a substantial part of the diversity of the economic discipline at their time and today (i.e. Keynes’ argument for the occasional government intervention versus Hayek’s laissez-faire economy).2 This paper will focus on the concerns they voiced regarding mathematics in economics, which were born out of their shared conviction of the complexity of economic reality. They argue that the world is too complex and varied for mathematics to be able to capture it, and that this thus poses limits to its use. They do not deny that mathematics can be useful but one must know its place and restrictions. In this respect they stand in sharp contrast to economic thinkers such as William Stanley Jevons, Irving Fisher, Paul Samuelson, Kenneth Arrow and Gerard Debreu, some of the founders of neoclassical mathematical economics, who believed that it was in fact possible to capture economic reality in mathematics and that it should therefore be adopted as the main engine of enquiry in economic science.
|Series||Erasmus Student Journal of Philosophy (ESJP)|
|Journal||Erasmus Student Journal of Philosophy|
van Dijck, S. (2015). Economics, Complexity and the Disenchantment of 20-29 the Social World. Erasmus Student Journal of Philosophy, 9, 20–29. Retrieved from http://hdl.handle.net/1765/124763